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Minnesota House passes GOP funding plan for road fixes

The Minnesota House of Representatives in session Monday, Feb. 23, 2015, at the state Capitol.Jennifer Simonson / MPR News

The Minnesota House staked out a position Tuesday in a debate over long-term transportation funding with a 10-year, $7 billion plan that avoids a gas-tax increase.

The 73-59 vote in which one Democrat joined all Republicans in favor is far from the final word. The Democratic-led Senate has yet to vote on its proposal that includes a new fuel tax, something Gov. Mark Dayton has also called for. The House bill would redirect existing taxes on auto parts, vehicle leases and car rentals to highway construction and borrow billions more. All of the plans are aimed at tackling hundreds of projects, from road resurfacing to lane expansions to new bridges.

House Transportation Committee Chairman Tim Kelly, a Red Wing Republican, said pinning Minnesota's road fixes on a volatile revenue source like gasoline taxes relies on antiquated thinking. He said it makes more sense to tap predictable taxes the state already collects and to use some of the budget surplus. His plan would also force the transportation department to squeeze more out of the dollars it gets.

"If ever there was a time for a new way of thinking and a new way of delivering transportation, it's now," Kelly said.

Although gas tax receipts are constitutionally dedicated to transportation needs, independent polling has shown the call to hike them is politically unpopular. No House Democrat offered an amendment to add one to the bill nor did Republicans force a vote on it to pin down every lawmaker.

But the Republican drive to shift auto-related taxes to a new transportation account would put road work into direct competition with other state programs, such as education and health care. And the bill's $1.3 billion in borrowing — not counting additional road borrowing the GOP is pledging to pass next year — carries tens of millions in interest costs.

Minority House Democrats keyed in on the tax shifts, saying the road money would be tempting to draw down if budget deficits return. "It's a house of cards, and all it is going to take is the slightest breeze to knock it down," said Democratic Rep. Joe Atkins of Inver Grove Heights.

They criticized as inadequate the $5 million it directs to improving railroad crossings to add safety measures, especially as more oil-tanker cars roll from North Dakota through Minnesota. More than 300,000 people in the state live within a half-mile of a railroad track.

Rep. Frank Hornstein, a Minneapolis Democrat, pushed unsuccessfully to assess railroad companies up to $32 million to fix grade crossings.

"They are making record, record profits hauling this Bakken oil,'' he said. "This should not fall on our taxpayers alone."

Champlin Rep. Mark Uglem and other Republicans noted the bill's allocation is double what was provided last year and will be spent in concert with track-safety efforts undertaken by railroad companies. "I shudder to think if we assessed every private business that was profitable in this state," Uglem said.

There's also a divide about whether to expand mass transit and how extensively. The GOP bill would level off funding for the Twin Cities-area transit agency, which some warn could lead to route cuts or fare increases.

Even with their concerns, House Minority Leader Paul Thissen acknowledged that Republicans and Democrats have made a huge step toward passing a transportation funding package by agreeing on scale — the Senate, governor and House are all aiming for repairs north of $6 billion.

Speaking earlier Tuesday, Dayton said it would be difficult but not impossible to merge the competing plans before a May 18 adjournment. He continued his call for a new wholesale gas tax, which would fluctuate based on the price of gas but be no lower than 16 cents per gallon.

"We're wide apart but at least we have the basis for a beginning" of negotiations, Dayton said. "I don't know how to do the math that gets us to a successful resolution. I'm willing to compromise if we find one that's genuine on both sides."

Advocates for a comprehensive transportation plan pleaded with both parties to find some middle ground rather than leave empty-handed. Representatives from Move MN, a coalition of businesses, cities and labor groups, said they're pushing behind the scenes for a compromise.

"It's too big and too important to not address," the group's co-chair Dave Van Hattum said. "There's plenty of time this year for compromising and getting things done."